FILE PHOTO: U.S. President Donald Trump meets with China's President Xi Jinping at the start of their bilateral meeting at the G20 leaders summit in Osaka, Japan, June 29, 2019.
On Tuesday, China announced that it will accept tariff exemption applications for 696 products which are imported from the United States which includes pork, beef, liquefied natural gas, soybeans and oil.
Per CNBC, the additional tariffs on these products were imposed amid the escalation of the China-U.S. trade dispute. Companies hoping to get exemptions will be allowed to submit applications starting March 2 according to China's Finance Ministry.
The announcement came after the two countries had agreed on their Phase 1 trade deal and it took effect February 14, which is the third time that China has offered tariff exemptions on US products.
As part of the agreement, China has obligated to boost its purchase of services and goods from the US by $200billion in two years. In this regard, they have already rolled back additional tariffs on products imported from the US after the deal was signed.
However, after the rise of the coronavirus outbreak, China had raised its concerns on its ability to meet the targets set by the deal. The epidemic led the country's authorities to impose restrictions on transportation and travel in order to control the spread of the disease that has killed almost 1,900 people and has infected more than 70,000 inside the countries borders.
The government's efforts to contain the diseases before it becomes a world wide epidemic have had factories operating with a reduced manpower or worse, completely shut down. Consumption was also stunted due to the fact that people are afraid to even leave their own homes or go to public places in fear of contacting the virus. Hence, as the rise of COVID-19 continues, so does the fall of the country's economy.
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According to Reuters, Larry Kudlow, an adviser of the White House has informed that President Xi Jinping of the People's Republic of China informed US President Donald Trump that China will still meet their Phase 1 trade deal purchasing trargets amid the looming threat of coronavirus.
During the announcement made on Tuesday, it was emphasized that Chinese firms have to submit their tariff exemption applications based on the market conditions and commercial consideration of goods.
A trader even said that they would still go for Brazilian soybeans based on market free will, unless the government forces the firms to apply for tariff exemptions and purchase soybeans from the US. He further added that this year, Brazilian beans are of good quality and price.
Aside from the aforementioned products, other products that are subject to additional tariff exemptions imposed include Wheat, corn, sorghum and denatured alcohol. There are also medical devices and metals including copper, aluminum scrap and copper ore concentrates that are subject to the tariff exemption.
Among the US products that are eligible for exemption also include pharmaceutical products like recombinant human insulin and some antibiotics.
As reported by South China Morning Post, the exemptions will only be effective for one year and are still subject for approval.
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